Ted Sickinger has the report in the Oregonian, here. This will start in 2017. I’m no actuary, but the combination of lower assumed earnings and longer assumed life expectancies will mean a decrease in the monthly payout from the PERS annuity you get when you retire. At the same time lower assumed earnings will mean that employers will need to pay in more to keep the PERS books balanced, and longer assumed life expectancies will mean employers will have to pay in more to cover the expected costs of the annuities of past retirees.
Will VPFA Jamie Moffitt and “Around the 0” spin this increase in the cost of UO retirement benefits as an increase in the total compensation of UO faculty and staff, during the current union bargaining. Maybe something like
“Look! Your already generous benefit package will get even more generous in 2017! You don’t need a pay raise!”
A statement like this would be transparently false, but given that there’s still no retraction of the most recent “Around the O” post on benefits and the UO Senate White Paper goals, it would be in keeping with past UO statements.
One way that UO might consider saving money would be to revise the current Tenure Reduction Program, to encourage higher paid senior faculty to retire, so they can be replaced with cheaper, younger ones. The current TRP is not a very good deal for faculty, and since it is not aimed at faculty on the margin of retiring or continuing to work, it is not an effective program from the cost side either.
for any unclassified folk chafing at being in pers, after an initial 6 months, you may opt out of pets to a defined contribution plan which last time I checked for tier 2 contributed a total of about 13 percent, 7 from uo plus 6 percent individual pickup paid by UO. I opted out more than a decade ago. Would probably have been better staying in pers, but was worth the difference to get insulated from legislature and even friendly fire directed at retirees.
I’m currently on the tenure reduction plan and I’m quite happy with it, both financially and as a way to phase in retirement. I’m sure the incentives could be realigned, but how would you make it better for faculty and the university budget? I’m not disputing your statement but I’m curious.
I largely agree with “golden parachutist” about the TRP. I am on it as well (I can hear the entire UO matters forum community cheering right now).
Indeed, given the current “raise” discussion, the automatic 6% raise I got for signing the dotted line now looks pretty good (yes I know I could recover that simply by working 3-4 more months) – but still, having more beer money now, is essential.
I don’t really understand why UOmatters considers the TRP to be a bad deal, perhaps ‘dead duck’ can comment on this. Indeed I do think it is used by faculty on the margin (though I do agree that the overall cost of running the TRP is becoming higher).
Finally, replacing aged faculty with young’uns is not necessarily cheaper given potential startup costs. Indeed, in my department a typical start up package is 8 times larger than my annual salary.
“encourage higher paid senior faculty to retire, so they can be replaced with cheaper, younger ones.”
Is UOM making an argument for not routinely increasing pay for longevity or rank? If younger, cheaper faculty are a better deal for UO, why pay senior faculty more?
Someday, it won’t be 20 years, I may be on TRP. I see it as a good deal. The most attractive part is the guaranteed for 5 years opportunity to teach if so desired, while phasing out other responsibilities that may have gotten tiresome. I don’t especially want to be bribed to go out to pasture or off to the glue factory with a year’s salary or even more, as some places seem to offer. When and if I can’t or don’t want to pull my weight, in one way or another, I’d much rather let someone else have the position.
one of the primary reason that I (and a few others I know) signed up for TRP early is the belief that program will be cancelled in the future (maybe near, maybe far) due to a) increasing costs b) the special 6% raise essentially is a raise not yet covered by the CBA and c) future CBA negotiations may serve to kill this program as its taking up teaching slots by us OLD FARTS.
So I wouldn’t make a 20 year bet anymore on this …
I don’t see adjusting the guaranteed pension either for longer life expectancy or lower market returns as “cutting the benefit,” especially being in ORP and subject to a 401-k type discipline. In fact, if they raise the employer contribution rate, I and the other ORP people get a bigger monthly benefit, not less.
Judging the real value of the pension benefits is tricky, but no impossible, and as I’ve argued many times, as best I can tell, UO faculty are pretty close to 100% parity in total compensation, when an honest accounting is made — NOT by counting as a benefit money that goes to others, i.e. the already-retired.
speaking of PERS — an article here about how Oregon PERS pays more to “Wall Street” for investment management — and gets inferior returns. It’s not an insignificant amount of money involved:
http://www.golocalpdx.com/news/Oregon-Pays-Among-the-Highest-Wall-Street-Pension-Fees-in-US